Mr Abbott also heaped praise on Japan in comments that come just days after China slapped harsh new tariffs on coal imports and will be noted in Beijing as negotiations on a China-Australia Free Trade Agreement move towards conclusion.

Industry has estimated the new tariffs could cost Australia's economy hundreds of millions of dollars annually, though it will be some time before exact estimates can be made.

"Let's have no demonisation of coal," Mr Abbott said on Monday.

"Coal is good for humanity, coal is good for prosperity, coal is an essential part of our economic future, here in Australia, and right around the world."

The Prime Minister's comments, which angered the environmental movement, came at the opening of the $US3.4 billion ($3.9 billion) Caval Ridge Mine in Central Queensland, a joint venture between BHP and Mitsubishi. The mine will produce 5.5 million tonnes annually of metallurgical coal and employ about 500 people.

"This is a sign of hope and confidence in the future of the coal industry, it's a great industry, we've had a great partnership with Japan in the coal industry," Mr Abbott said.

"Coal is essential for the prosperity of the world."

"Energy is what sustains our prosperity, and coal is the world's  principal energy source and it will be for many decades to come."

The Coalition had affirmed its faith in the coal industry by abolishing the carbon tax and mining, Mr Abbott said, but if there was a change of government at the next election both of those taxes could come back.

"If you want to sustain the coal industry, if you want to sustain the jobs, if you want to sustain the towns that depend on the coal industry you have got to support the Coalition, because we support coal, we think that coal has a big future as well as a big past."

Mr Abbott's comments about coal having a bright future are in conflict with the United Nations' top climate official Christiana Figueres, who has warned most of the world's coal must be left in the ground to avoid catastrophic global warming.

Less than two weeks ago, a lead adviser to German Chancellor Angela Merkel lashed the Abbott government's championing of the coal industry as an economic "suicide strategy".

ANU economist Frank Jotzo said he was alarmed the Prime Minister used words like "faith" to describe his feelings about coal's future in Australia.

Dr Jotzo said Australia's reliance on coal was short-sighted and a "potentially economically dangerous" strategy, adding that the Prime Minister's comments could be read as a rebuke following China's tariff move.

Locking in Australia's reliance on coal was short-sighted and "if we were to hitch our wagon to coal we would be putting the Australian economy on a downward trajectory".

Climate Institute chief executive John Connor said the Prime Minister was "taking a higher and higher stakes gamble by putting all the chips on coal".

Earlier on Monday, Opposition Leader Bill Shorten said that Australia risked being seen as the climate sceptic capital of the world ahead of the G20 meeting in November.

"We've got the G20 coming up. Most nations in the world at the G20 are dealing with climate change. Yet we're the climate sceptics capital of the world," he said.

"The rest of the world is moving towards taking real action on climate change, yet we've got a government who's slammed the nation into reverse gear and retreating away from action."

Over the weekend, Mr Shorten told Fairfax Media that Labor would take a carbon price - thought not a tax - as policy to the next election.

And he has previously left open the possibility of some form of resources tax, though he has promised to first consult with business over such an impost.

with Amanda Saunders, Gareth Hutchens

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